Montgomery, AL – Alabama Attorney General Steve Marshall has joined 22 other state attorneys general in supporting the advancement of the Financial Integrity and Regulation Management Act, known as the FIRM Act, currently under consideration in Congress.
The legislation, which is being promoted by a coalition of Republican lawmakers and state attorneys general, aims to prevent federal financial regulators from using “reputational risk” as a basis to influence or restrict financial institutions’ decisions. Supporters argue that this practice has been used to pressure banks into denying services to individuals and organizations based on their political or ideological affiliations.
In a public statement, Attorney General Marshall emphasized the coalition’s concern about what they view as growing politicization within the banking system. The group contends that the concept of reputational risk has led to the exclusion of certain clients from financial services — including religious groups, conservative-leaning organizations, and individuals with controversial public profiles.
The coalition cites examples of past de-banking incidents involving firearms manufacturers and payday lenders, and claims the practice has expanded to affect a broader range of groups, including conservative tech leaders and even former President Donald Trump and the Trump Organization.
The attorneys general also criticized the influence of proxy advisory firms, which they argue are pressuring shareholders to oppose financial reforms that would curb politically motivated banking practices.
U.S. Senator Katie Britt of Alabama is among the co-sponsors of the FIRM Act, which supporters say would add safeguards to protect individuals and organizations from viewpoint-based financial exclusion. The legislation seeks to clarify that federal regulators cannot suggest or mandate actions by financial institutions based on the reputational implications of their clients’ beliefs or affiliations.
In addition to Alabama, the letter supporting the bill was led by South Carolina and signed by attorneys general from North Dakota, Georgia, Ohio, Florida, Montana, Louisiana, Texas, Idaho, Oklahoma, Arkansas, Nebraska, West Virginia, Tennessee, South Dakota, Utah, Virginia, Mississippi, Missouri, Kansas, and Pennsylvania.
The FIRM Act remains under consideration in the U.S. Senate, where lawmakers will determine whether to move the proposal forward in the legislative process.
